1991 (5) TMI 168 - AT - Customs

Summary

Issues Involved:
1. Jurisdiction of the Delhi Collector to adjudicate the case.
2. Alleged fraudulent importation and mis-utilization of additional licenses.
3. Confiscation of goods and imposition of penalties.
4. Post-importation violations and their adjudication.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Delhi Collector to Adjudicate the Case:
The appellants contested the jurisdiction of the Delhi Collector, arguing that the goods were imported and cleared at Bombay Customs under Section 47 of the Customs Act, 1962, and thus, the Delhi Collector had no authority to adjudicate the proceedings. The Department contended that the Delhi Collector had jurisdiction due to the fraudulent clearance of goods at Bombay Customs. The Tribunal held that the jurisdiction is territorial-cum-functional and that the Delhi Collector had no jurisdiction to pass orders under Section 110 for goods cleared by Bombay Customs. The proper course of action would have been to inform the Bombay Customs for appropriate action. The Tribunal referenced previous decisions, including Ramnarain Bishwanath v. Collector of Customs, Calcutta, and Singh Radio & Electronics v. Collector of Customs, Delhi, to support its conclusion.

2. Alleged Fraudulent Importation and Mis-utilization of Additional Licenses:
The Department alleged that M/s. Casino Electronics (P) Ltd. and its Director fraudulently imported 63 Fax Machines using non-transferable additional licenses from three export houses, and subsequently sold these machines in the open market. The Delhi Collector ordered the confiscation of the Fax Machines under Sections 111(d) and 111(o) of the Customs Act due to the mis-utilization of licenses and violation of import conditions. The appellants argued that the goods were imported against valid licenses and sold to buyers, including government departments, without any fraud.

3. Confiscation of Goods and Imposition of Penalties:
The Additional Collector of Customs, New Delhi, ordered the confiscation of the Fax Machines and imposed penalties on the involved parties. The appellants contended that the confiscation and penalties were unjustified as the goods were cleared by the proper officer at Bombay Customs. The Tribunal held that the Delhi Collector had no jurisdiction to confiscate the goods or impose penalties, as the proper authority was the Bombay Customs.

4. Post-importation Violations and Their Adjudication:
The appellants argued that any post-importation violations, such as selling goods to non-actual industrial users, should be adjudicated by the Chief Controller of Imports & Exports (CCIE) and not by the Customs authorities. The Tribunal agreed that the power to adjudicate post-importation conditions is vested in the CCIE, referencing the decision in Audio Vision v. Collector of Customs. The Tribunal emphasized that the Delhi Collector should have referred the matter to the appropriate authority with all-India jurisdiction.

Separate Judgments Delivered by Judges:
- Member (Judicial): Concluded that the Delhi Collector had no jurisdiction to adjudicate the case and allowed the appeals on the point of jurisdiction.
- Member (Technical): Differentiated between two groups of appellants and concluded that the Delhi Collector had jurisdiction for Group II appellants but not for Group I appellants. Suggested that the appeals of Group II be posted for hearing on merits.
- Third Member (Technical): Concurred with the Member (Judicial) that the Delhi Collector had no jurisdiction to adjudicate the case for all appellants.

Final Order:
In view of the majority opinion, the appellants succeeded on the point of jurisdiction, and all the appeals were allowed.